The Inspector General of the Department of Housing and Urban Development called for civil and administrative actions against loanDepot for allowing ineligible “gifts” on FHA-insured loans.Acting on a referral from HUD’s Quality Assurance Division, the IG focused on FHA loans originated by loanDepot that included downpayment assistance from the Golden State Finance Authority. A review of 75 loans endorsed from Oct. 1, 2013, to Jan. 31, 2015, determined that 62 loans involved gift funds that did not comply with FHA requirements. In addition, the privately held nonbank lender “inappropriately charged borrowers $25,700 in fees that were not customary or reasonable, as well as $46,510 in discount fees that did not represent the purpose of the fee,” the IG said. The IG blamed loanDepot’s overreliance on Golden State’s Platinum Downpayment Assistance Program as well as ...

VA loan servicers have until Nov. 1, 2015, to review and comment on the new VA Servicer Handbook and ensure compliance with the established policy and guidelines. The servicer handbook combines guidance issued via circulars and news flashes over the years. In addition, the agency has started hosting biweekly servicer calls to update VA servicers on policy changes and new developments, according to Andrew Trevayne, assistant director of loan management with the VA Home Loan Guaranty Program. VA-guaranteed loans are serviced through the VA Loan Electronic Reporting Interface (VALERI) system. The handbook also discusses roles and responsibilities for VA loan-administration staff and servicers. It does not change or supersede any regulation or law affecting the loan program. Servicers may submit comments on the updated handbook to ...

In a report sure to be embraced by industry critics of the CFPB, the bureau’s Office of Inspector General said the agency needs to improve its management of its consumer complaint database. “We identified areas in which management controls should be improved to enhance the accuracy and completeness of the consumer complaint database,” said the OIG in a recent report. For instance, the bureau’s Office of Consumer Response “has implemented controls to monitor the accuracy of complaint data in the internal case management system, which contains all consumer complaints received by the CFPB, but it has not established separate management controls to ensure the accuracy of data extracted from the system and included in the consumer complaint database,” according to ...

Two of the biggest lenders in the land saw consumer complaints about their bank accounts and bank services rise by double digits during the second quarter, outpacing the overall industry, which saw a more modest increase during the period. An analysis by Inside the CFPB found that Bank of America and Wells Fargo experienced increases of 20.3 percent and 13.2 percent, respectively, from the first quarter of 2015 to the second quarter. Year over year, BofA saw a more moderate rise of 6.4 percent in consumer criticism, whereas Wells actually saw a 12.5 percent drop. ...

Two of the top three entities associated with money transfers saw complaints against them leap by double digits, both in the second quarter and for the first half of the year, according to a new analysis by Inside the CFPB. The top target of criticism, MoneyGram, saw complaints jump in this regard 53.5 percent and 84.7 percent, respectively, while third-ranked PayPal experienced surges of 47.1 percent and 51.8 percent, respectively, for the two time periods measured. However, second-ranked Western Union saw just a slight uptick of 3.1 percent in the second quarter, and a modest downturn at the mid-year mark versus a year ago, 3.0 percent. ...

Wells Fargo this week reinstated the 640 minimum credit score requirement, following through on its threat to re-impose credit overlays due to its frustration with FHA’s republished loan-level certification proposal. Officials said the re-proposed version of the proposal, which was initially issued for comment in May, still disappoints in spite of industry input to put concerned FHA lenders at ease (See next story for background). In 2014, Wells dropped the minimum credit-score requirement to 600 for FHA borrowers after talks with the Department of Housing and Urban Development and policymakers. The FICO readjustment applies to Wells’ FHA retail purchase loans, aligning it with the 640 minimum credit score requirement for the bank’s correspondent business. In a previous statement, Wells reiterated the need for clearer rules in order to ...

FHA lenders funded $7.8 billion in new Home Equity Conversion Mortgage loans during the first half of 2015, up 8.2 percent from the same period a year ago. HECM loan production was slower in the second quarter with originations down 1.1 percent from the prior quarter. Purchase loans accounted for 86.1 percent of all HECM transactions during the first six months. Interestingly, borrower bias against adjustable-rate loans appeared to have eased. Fixed-rate HECMs accounted for only 15.4 percent of originations during the first half of the year. Initial principal amount at loan origination totaled $4.6 billion over the same period. On a fiscal year-to-date basis, the FHA reported a total of 53,372 HECM endorsements, up from 47,662 HECM endorsements in fiscal YTD 2014. Meanwhile, HECM endorsed cases increased to 5,750 in August compared to ... [ chart ]

The Department of Housing and Urban Development recently saw its long-running attempt to recover $179 million from a bankrupt FHA lender come to a disappointing close, receiving only a little over half-a-million dollars after liquidation. HUD’s Inspector General gave the agency the green light to book its share of funds available to pay an $89.9 million HUD claim against the now-defunct lender Taylor, Bean & Whitaker, ending further action against the company. In 2006, whistleblowers filed a “qui tam” lawsuit in federal district court in Georgia alleging that TBW and Home America Mortgage had falsely certified and approved poorly underwritten loans for FHA insurance. In 2009, the two mortgage lenders filed for bankruptcy separately but were later consolidated by the court into one bankruptcy case. In May 2010, the Department of Justice, on behalf of HUD, filed a ...

Mortgage lending industry representatives called on the CFPB to establish a range of data safeguards if the agency intends to proceed with its expressed interest in “normalizing” its consumer complaint data.For the bureau’s purposes, “normalizing” the data refers to ways in which the agency could take the raw data it receives from its consumer complaint online portal and transform it to make it meaningful and useful to the general public.In commenting on the bureau’s recently released request for information on the subject, the American Bankers Association said it generally supports the concept and objective of providing context for the data. However, it “does not believe that any normalization strategy should proceed unless and until the bureau adopts measures ...

Consumer complaints to the CFPB about credit reporting were down slightly from the first quarter and up modestly at the mid-year mark versus a year ago, according to an analysis by Inside the CFPB. However, some dramatic differences were in play among the top 10 subjects of complaints. The most notable exception to the overall moderate trend line was sixth-ranked CoreLogic, which saw consumer gripes skyrocket an eye-popping 900.0 percent at the six-month mark compared to 2014. LexisNexis was also bad, with a 241.7 percent leap during the same time period. And Early Warning Services turned in the third-worst performance among the top 10, demonstrating a 100.0 percent increase in consumer criticisms. Overall, however, the results were far tamer. First ...